Good morning. Welcome to FNFF third quarter 2026 earnings conference call. During today's presentation, all callers will be placed in a listen-only mode. Following management's prepared remarks, the conference will be open for questions with instructions to follow at that time. I would now like to turn the call over to Lisa Foxworthy-Parker, Senior Vice President, Investor and External Relations. Please go ahead.

Thanks, Operator, and welcome, everyone. I'm joined today by Mike Nolan, CEO, and Tony Park, CFO. We look forward to addressing your questions following our prepared remarks. F&G's management team, including Connor Murphy, CEO and President, and Mike Bailey, CFO, will also be available for Q&A. Today's earnings call may include forward-looking statements and projections under the Private Securities Litigation Reform Act, which do not guarantee future events or performance. We do not undertake any duty to revise or update such statements to reflect new information, subsequent events, or changes in strategy. Please refer to our most recent quarterly and annual reports and other FCC filings for details on important factors that could cause actual results to differ materially from those expressed or implied. This morning's discussion also includes non-GAAP measures which management believes are relevant in assessing the financial performance of the business. Non-GAAP measures have been reconciled to GAAP as required and in accordance with SEC rules within our earnings materials available on the company's investor website. Please note that today's call is being recorded and will be available for webcast replay. And with that, I'll hand the call over to Mike Nolan.

Thank you, Lisa, and good morning. We delivered strong third quarter results across both our title business and F&G segment. Demonstrating the power of our dual earnings engines and our ability to execute in dynamic market conditions. I'd like to start by thanking our employees for their hard work and dedication. There is no doubt we are navigating a challenging real estate cycle. Yet our team continues to generate industry-leading performance that is well ahead of the competition. Together, we are managing through this period with a disciplined operating strategy which generates a steady level of free cash flow. This allows us to continue to invest in recruiting talent, attractive acquisitions, technology, and innovation as we manage the business for the long term while performing in the immediate term. Turning to our title segment, we delivered adjusted pre-tax title earnings of $422 million for the third quarter, up 3% over the third quarter of 2025. This generated an industry-leading adjusted pre-tax title margin of 17.1% for the third quarter as compared to 17.8% in both the sequential and prior year quarters. As we discussed on our second quarter call, we expected some modest sequential compression due to recent strategic investments in recruiting and attractive tuck-in acquisitions in recent months where expenses tend to come ahead of the associated revenue contribution. Decompression compared to the third quarter of 2025 was also expected due to favorable one-time items in the prior year period and continued investment in technology. Overall, our third quarter results reflect strong performance across the business and disciplined expense management. Looking at our title results more closely, Starting with purchase, U.S. existing home sales continue to reflect a low transactional environment due to mortgage rates and housing market dynamics. Mortgage rates remain high, but have fallen from their recent peak following their Federal Reserve rate hike in September. This is the opposite of the trend we saw in 2025 and has amplified the normal seasonal decline. Over the course of the year, purchase orders opened have held up well through August. with each month comparing favorably to the prior year before falling behind by 2% for the month of September. Importantly, we continue to steadily outperform relative to our peers. For the quarter, our daily purchase orders opened were up 3% over the third quarter of 2025, down 9% for the second quarter of 2026, and down 6% for the month of October versus the prior year. Our residential refinance volumes continue to be responsive to 30-year mortgage rates, although accounting for only 6% of our direct revenue in the third quarter. Notably, we have demonstrated our ability to generate strong, adjusted pre-tax title margins without a substantial refinance market over the past five years. Refinance orders opened were $1,400 per day in the third quarter, as compared to 1600 in both the prior year and sequential quarters. Given mortgage rates in October, we saw refinance orders opened decreased to 1200 per day, reflecting how refinance volumes can quickly change with moves in rates. Our refinance orders opened per day were down 11% from the third quarter of 2025, down 7% from the second quarter of 2026, and down 35% for the month of October versus the prior year. Our commercial business is on pace for a record year. Direct commercial revenue was $1.2 billion in the first nine months, up 22% over $1 billion in the first nine months of 2025. National and local market daily orders opened, trended down 1% and up 6% respectively in the third quarter as compared to the prior year quarter. Total commercial orders opened were 876 per day, up 2% over the third quarter of 2025, down 5% from the second quarter of 2026, and down 6% for the month of October versus the prior year. We closed 24 transactions generating over $1 million each in premiums in the third quarter across multiple asset classes. in both our direct and agency businesses. This is reflected in our higher trending commercial fee profile. We view the current momentum in commercial as sustainable over the near term. Our commercial strength continues to be broad based across both geographies and asset classes. The composition of our commercial pipeline remains healthy and includes a mix of industrial, data centers, multifamily, affordable housing, Retail and Energy Transactions. At this time, we expect office to gradually recover with top tier properties leading the rebound. One question that I often receive is around data centers. We have seen data center transactions in our pipeline over the past four years, and in some cases have already seen refinances of transactions that closed between 2022 and 2024, which is an underappreciated demand driver. Similar to energy, data centers tend to be higher premium transactions, although comprising a small portion of the overall order count. This shows up in our national fee profile, which benefits from the larger energy and data center deals. To bring it all together, total orders opened averaged 5,800 per day in the third quarter, with July at 5,900, August at 5,800, and September at 5,600. For the month of October, total orders opened were 4,700 per day, down 17% from the prior year. Looking to the fourth quarter, we remain optimistic about our commercial momentum, although we recognize the impact on residential purchase and refinance volumes of elevated mortgage rates and the typical fourth quarter seasonality. All else equal, we would expect our adjusted pre-tech title margin to move toward the lower end of our 15% to 20% normal range in the fourth quarter. Over time, as mortgage rates eventually improve, we believe residential purchase and refinance activity will accelerate and trend toward historical levels. This recovery represents additional earnings power given the operational leverage that we have built into our model. This operational leverage is also supported by the investments we continue to make in technology and AI. FNF provides essential services that extend well beyond the title insurance policy. We also manage the settlement process from start to finish. We are the rails on which real estate transactions run. For years, we have invested with the vision of building a differentiated technology platform with one overarching objective, to make every real estate transaction faster, safer, and simpler. That objective is showing up in what we are delivering today. Since we rolled out our partnership with Clear last year, we have run nearly 100,000 enhanced identity verifications across our operations to counter impersonation and wire fraud in property sales. Since we launched property monitoring earlier this year, we have provided visibility and alerts as a complimentary service to over 250,000 homeowners after closing. We continue to receive positive feedback from our customers on this value-add service. We are accelerating our property monitoring rollout, and we expect it to become the largest footprint in the industry. We are also driving deeper digital engagement with nearly 88% adoption of in here across eligible residential sale transactions. That is the foundation. AI is the next layer. We're already deploying AI driven agents into production workflows to improve speed and execution across the title and settlement process. This isn't a pilot, it's operational. AI is still early, but the direction is clear. A better experience for our customers and higher productivity for us. Combined with our broader technology investments, these capabilities strengthen our competitive position and our ability to consistently deliver industry-leading adjusted pre-tax title margins over time. Turning now to our F&G segment, F&G's assets under management before reinsurance have surpassed the $75 billion milestone at September 30th. Gross AUM of $76.2 billion was up 7% over the prior year quarter. F&G continues to expand its retail and institutional franchises and delivered its best core retail sales quarter in history. Opportunistic sales were intentionally lower due to returns below threshold. as F&G continues to allocate capital to the highest return opportunities. On a standalone basis, F&G reported GAAP equity excluding AOCI of $6.7 billion at quarter end and has grown its book value per share excluding AOCI to $51.37, up 87% since the 2020 acquisition. We believe that the components of F&G's business, the new business platform, profitable enforced block, and capital light fee-based strategies, each represent a distinct and measurable source of long-term value that are not yet fully reflected in F&G's current market valuation. At recent levels, the F&G stock has an especially attractive dividend yield around 5%. which is above average for the publicly traded life and annuity sector. We remain pleased with F&G's operating performance and foresee plenty of opportunities to grow AUM and increase the value of the business over time. With that, let me now turn the call over to Tony to review F&F's third quarter financial performance and provide additional insights.

Thank you, Mike. Starting with our consolidated results, we generated $3.6 billion in total revenue in the third quarter. Excluding net recognized gains and losses, our total revenue was $3.5 billion as compared with $3.9 billion in the third quarter of 2025. We reported third quarter net earnings of $633 million, including net recognized gains of $29 million, versus net earnings of $358 million including $176 million of net recognized gains in the third quarter of 2025. Adjusted net earnings were $352 million or $1.32 per diluted share compared with $439 million or $1.63 per share in the third quarter of 2025. The title segment contributed $315 million, the F&G segment contributed $72 million, and the corporate segment had an adjusted net loss of $7 million before eliminating $28 million of dividend income from F&G in the consolidated financial statements. Turning to third quarter financial highlights specific to the title segment, our title segment generated $2.5 billion in total revenue in the third quarter, excluding net recognized losses of $19 million, compared with $2.3 billion in the third quarter of 2025. Direct premiums increased 11% over the prior year, agency premiums increased 3%, and escrow, title-related, and other fees increased 10%. Personnel costs increased 10% and other operating expenses increased 13%. All in, the title business generated adjusted pre-tax title earnings of $422 million, up 3% over $410 million in the third quarter of 2025, and a 17.1% adjusted pre-tax title margin in the quarter versus 17.8% in the prior year quarter. Our title and corporate investment portfolio totaled $5 billion at September 30th. Interest and investment income in the title and corporate segments was $98 million, down 10% from the prior year quarter and excluding income from F&G dividends to the holding company. The prior year period included a benefit from a legal settlement of $7 million. Looking ahead, we expect quarterly interest and investment income to trend up from $98 million in the third quarter to around $105 million in the fourth quarter, and then increase around $5 million in each subsequent quarter through 2027, assuming an additional 75 basis points of Fed rate hikes over the next nine months. In addition, we expect approximately $28 million per quarter of common and preferred dividend income from F&G to the corporate segment in the next two quarters. F&G's dividend income will decrease to approximately $25 million per quarter thereafter, following conversion of the mandatory convertible preferred stock during the first quarter. Our title claims paid of $72 million were $3 million lower than our provision of $75 million for the third quarter. The carried reserve for title claim losses is approximately $10 million, or 1% above the actuary's central estimate. We continue to provide for title claims at 4.5% of total title premiums. Next, turning to financial highlights specific to the F&G segment. Since F&G hosted its earnings call earlier this morning and provided a thorough update, I will provide a few key highlights. F&G's top line AUM before reinsurance increased to $76.2 billion at September 30th, up 7% over the prior year. This includes retained assets under management of $56.2 billion. F&G reported gross sales of $3 billion for the third quarter. Gross sales were comprised of $2.3 billion of core sales, including record core retail sales of $2.1 billion, and nearly $700 million of opportunistic sales. This mix reflects pricing discipline and capital allocation to highest return opportunities. F&G's net sales were $1.4 billion in the third quarter. This reflects flow reinsurance in line with capital targets for multi-year guaranteed annuities and fixed indexed annuities. F&G's retained investment portfolio performed very well once again this quarter. The portfolio is high quality with 97% of fixed maturities being investment grade. It is well matched to the liability profile and diversified across asset types. Credit-related impairments have remained low and stable. Importantly, F&G has a clean governance model with Blackstone with no inherent conflict of interest. Adjusted net earnings for the F&G segment were $72 million for the third quarter, reflecting our approximate 72% ownership stake. compared with $139 million in the third quarter of 2025, which reflected our approximate 82% ownership stake and included the F&G Life Free subsidiary, which was sold on March 1st, 2026. F&G's core spread remains consistent as the business maintained disciplined pricing and rate setting. F&G continues to provide an important complement to our title business. In the first nine months, the F&G segment contributed 22% of F&F's adjusted net earnings, down from 32% for the first nine months of 2025. Turning to capital and liquidity, F&F continues to maintain a strong balance sheet and balanced capital allocation strategy. As Mike mentioned, we have consistently generated a steady level of free cash flow, allowing us to continue to invest in our business and build for the long term. We also continue to return excess cash to shareholders. During the third quarter, FNF returned approximately $143 million of capital to shareholders. This brought capital returned to shareholders during the first nine months of the year to approximately $561 million. Of note, we only completed $5 million of share repurchases during the third quarter, given that we were in a closed trading window for much of the quarter due to the timing of material nonpublic information and our standard corporate governance policies. From a capital allocation perspective, we ended 2025 with $659 million in cash and short-term liquid investments at the holding company. During the first nine months, our cash position and cash generation funded $417 million of common dividends paid, $61 million of holding company interest expense, $144 million in opportunistic share repurchases, and approximately $60 million of investments and a handful of tuck-in and other title-related acquisitions, the majority of which were in the third quarter, all while keeping pace with wage inflation and funding the continued higher spend in risk and technology required in today's landscape. We ended the third quarter with $545 million in cash and short-term liquid investments at the holding company, which is about 83% of the amount held at year-end 2025. This concludes our prepared remarks and let me now turn the call back to our operator for questions.

Thank you. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. and for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment while we poll for questions. Our first question is from Bose George with KBW, please proceed.

Hey guys, good morning. In terms of margins, I know you guys don't like to sort of forecast margins, but I was just trying to think through the puts and takes looking out into next year. Like if the Mortgage Bankers Association is right, and we have a smaller mortgage market, and the comp's obviously getting tougher on commercial. Do you think the margins, prospectively, could be flat, or could there be pressure with the smaller mortgage market? I'm just curious how you're thinking about it.

Yeah, Boze, good question. We delivered 17.1% margin in a pretty tough environment in the third quarter, and we're optimistic, really, as we look to next year. that we could have a better rate environment. The 10 years come down 50 basis points this month and the daily rates following. And while we don't manage the business outlooks, we're optimistic about next year. What we control at the end of the day is our operating discipline, our focus on our customers and employees, and the technology investments that allow us to continue to outperform regardless of the volume environment.

Okay, great. Thanks for that. And then actually just on the executive order that came out, it's obviously kind of broad in terms of what it says on expanding the pilot and LLPA potential reductions, etc. But have you had any conversation with FHFA in terms of what that might look like in practice? Because it seems like it could be a lot of different things.

Yeah, I think it's too early to say, Bo, because Really all the executive order did was direct the director to think about things.

So what comes out of that, we just don't know yet.

Okay, that makes sense. Thanks a lot.

Our next question is from Terry Ma with Barclays. Please proceed.

Hi, thank you. Good morning. Can you maybe just update us? Good morning. Can you maybe just update us on the recruiting outlook and how we should think about personnel costs for title going forward? And then on the step down for the fourth quarter margin, like any color on how much of that is seasonality and market versus, you know, just incremental costs for recruiting and tech in the run rate?

The way I think about recruiting is that it's really a margin enhancer. In the short term, you can have margin compression from it. But both recruiting and acquisitions ultimately drive higher margins as the people ramp up to full productivity. As to the fourth quarter, it's both seasonality, as we've seen orders come down, particularly refi with higher rates, and the strong recruiting and acquisitions we've had. Really, this year, but particularly in the third quarter, we did add a 200-plus person agency and had more than 70 Revenue Recruit. So that was 300 ads in the third quarter. And we're recruiting at a level that's probably 25% stronger than we had last year, but we fully expect those to be really margin enhancers as we go into 27.

Got it. Okay. And then you called out data center refi. Any way to kind of size what You've seen thus far and what the outlook is over the next year or two?

Well, there's a lot of conversations in the media about data centers. We can't predict what happens with data centers. I fully expect data centers to continue, whether there's more or less, I don't know. The call-out really had to do with that these aren't one-and-done things. Like any commercial property, or really any piece of property, they transact again over time. So we see that as an underappreciated demand driver going forward, but really expect overall for commercial that 27 will be another strong year. Our pipeline is good, and the strength continues to be broad-based across geographies and asset classes.

Great. Thank you.

Thanks.

As a reminder, just star one on your telephone keypad if you would like to ask a question. Our next question is from Mark Hughes with Truist Securities. Please proceed.

Yeah, thank you. Just, Mike, I know you haven't been able to get any clarity on the title waiver program, but could you refresh us on, you know, as the When it was a waiver program, what classification, what proportion of the refis were subject to the waiver? Just your latest understanding on how to dimension it.

Sure. There's not a lot of transparency on it, but I think both Fannie Mae and Freddie Mac commented in a national, I think it was National Housing News article or something like that, that they had handled

22,000 waiver transactions to date. So I assume that means over the past two years, 22,000.

There were over 3 million residential refinances over those two-year periods. So that's about the best information we've seen publicly on it. I would also just say anecdotally, I still do not have anyone in our world here at the F&F family of companies really telling me they're losing orders to the waiver programs.

Yeah, yeah. Very good.

And then October down 6% in terms of purchase orders. What was your commentary? The interest rates have been so volatile. I'm just sort of curious if you have any sense of kind of recent weeks, any kind of granularity on that. I know it's probably not worth pursuing, but I'm just sort of curious.

The sequential drop-off of 9% is just a little beyond our normal seasonal number. We've seen that running about 7.5% for the last five years. And so nine is not way outside of that number. But my instinct is that we are seeing a little bit more than the seasonal effect because of the rate movement that we saw, particularly in September. But it can change quickly. And as I said, the 10 years come down 50 basis points in the last, The Daily Rate is down to, I think, under 7.2. It was at 7.6 on September 30th. So these things can change quickly. And we still believe there's a lot of underlying demand for housing. And as rates ease, transactions, sales, and refinances will follow. So we'll just have to manage

as we always do based on the environment that we're in at the moment.

Yeah. And then if I could, a question just kind of very high level on F&G, and I did listen to the call this morning. Their assets under management are pretty stable year over year. They've been pretty active using reinsurance. The gross sales have been quite strong, but they've been focusing more on capital efficiency. When we think over the next year, if gross sales continue to be strong, is that, as you see the business, is that the approach that will continue, that the asset center management reasonably stable, use refi, return capital? Is that kind of the broader strategy?

Thanks, Mark. This is Tony. I may turn part of this over to the F&G team. They're in the room and are better equipped than I to handle it. But yes, the focus has been on really selling into the channels that make the most sense from a capital and an earnings perspective. And at this point, reinsurance has been a very opportune area especially on the MIGA side and with the focus on capital light and earning, own distribution and maximizing our earnings results, I think that growing that gross number and that net number more modestly, I think is where we intend to go. I mean, in terms of F&G, and if you listened to the call this morning, You heard they had a very strong quarter. I think it was the strongest core retail sales that we've ever seen for a particular quarter at $2.1 billion. That part has been very, very welcome. And really, the performance overall from F&G has been very strong over the six years under our ownership. And the challenge, the elephant in the room, so to speak, that we all We all see is valuation and the fact that we have an asset here that with $6.7 billion in gap book value that's performing very well, and yet we just don't see that valued in F&G share price or frankly in F&F share price. And so that's a continued frustration that we're dealing with and working to improve, but that's kind of where that stands. I don't know, guys, if you wanted to add anything to that.

This is Mike Bailey. I will just state that I think everything that Tony said is accurate. We certainly do rely on floating insurance as part of our capital life fee-based strategy. We do expect to see high single-digit growth in gross AUM, and we expect to see low single-digit growth on a net AUM basis. It's important to note when comparing to the year ago period that the year ago period includes FG Life Re, which was our Bermuda entity, and that entity was sold earlier this year. That was $1.8 billion of assets under management that kind of came out of that number. So normalizing for that sale and the monetization of that property certainly puts us back within those trends that we're targeting.

Yeah, and this is Connor. Let me add as well, like, from the FG perspective, we're not satisfied, and we recognize that we're being undervalued, but there's a lot of ways that we can unlock that value within the four walls, if you will, and we're focused on the optimal ways to do that in the coming quarters.

Appreciate that. Thank you. Thanks.

Our next question is from Oscar Neves with Stevens, Inc. Please proceed.

Good morning, and thanks for taking my questions. I wanted to start with next year. You've said you don't manage to an outlook. But if we think about 2027, can you help us frame revenue and the title margin? And where does the operating leverage show up if the market is flat? And also how personnel tech and recruiting costs could potentially offset that?

Well, I would say in terms of expectations, we expect commercial to remain very strong. As I said before, we're optimistic that we could get a better rate environment, which will add transactions to the mix. And we're layering AI and technology that will enhance productivity over time. So those are all drivers of better outcomes for the business. If we get a weaker environment and there's less transactions, there's always levers that we can use to make sure we're protecting our margins, as we've always done. and that includes having to make the company smaller. And we've shown that over time. And also grow market share, which is why we're focused on things like recruiting and acquisition. So there's never one thing, Oscar, and we're looking at all of these things all the time and continue to deliver, as we've said before, regardless of the environment, the best margins in the industry.

Thank you. And following up on that point of recruiting and M&A, can you share how many people you've added? I know you guys include the field operations staff numbers in the release, but if you can give us a sense of overall hiring at the company level.

Yeah, I would say in the third quarter, we had about 300 from the acquisition and the recruiting. If you look at the release, we showed a net 100 addition in title direct staffing. We've already begun some staff reductions, and we'll evaluate those in the fourth quarter. For the year, I don't know how many we've added with acquisitions for the year, Tony. I don't know if you have that number.

It felt like what I heard was the number of 600 that was equally offset, but was that just recruiting or was that a company?

Thanks for that reminder. Yeah, Oscar, I think we've added about 600 this year just from recruiting and acquisitions. and really it makes up the ads we've made in the Title Direct footprint for the year. We're not really adding people for productivity. We're really going after revenue and building not only for now but for the longer term.

Okay, helpful. And on the M&A point, can you share anything incremental on the prices that you're paying on those deals that you just alluded to?

Yeah, it's really, Oscar, it's in the same ballpark that we've always done for tuck-in title acquisitions, which is somewhere between four and six times pre-tax earnings, and that's been consistent.

Okay, thank you. My last one is you, and it's on capital. Holding company cash is down since year-end, and you mentioned earlier that buybacks were live because of the closed window, and you just raised a dividend. I'm curious, like, what do you guys have a minimum level of cash that you target? And how do you set buybacks against the dividend, the tokens and debt, given all that, you know, the outlook and all these moving parts?

Yeah, yeah, great. Thanks for the question. Yeah, we did grow cash during the quarter, but we're at about 83% of the balance that we started the year with. So we added about $100 million or so Thank you for calling that out. But the dividend is part of our use, but we still have A lot of cash. Beyond that, we look at buybacks and M&A opportunistically. We certainly believe that with our shares trading where they are, that it's a great use of capital. And when our blackout is lifted, I would expect us to be aggressive in that area. In terms of your initial question, do we have a minimum number? I don't know that we have a minimum number. I would say 100%. 100 to $200 million is probably comfortable to have at holding company level. But again, keep in mind that we generate at the low end in a particular year, $800 million that gets upstream to hold co. And in a strong year, it might be a billion, three, four in that range. And so we do have a lot of cash generation to fund the regular needs, which would be primarily the dividend and then to a much smaller extent the interest expense.

Thank you so much. Have a good one.

Thank you.

There are no further questions at this time. This will conclude our question and answer session. I will now turn the conference back over to CEO Mike Nolan for closing remarks.

Thanks for joining our call this morning. We delivered strong third quarter results with our complimentary businesses executing well in a dynamic environment. We appreciate your interest in FNF and look forward to updating you on our fourth quarter earnings call.

Thank you for attending today's presentation. The conference call has concluded. You may now disconnect.